The Steve Forbes Flat Tax Form

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By JLP | September 15, 2005

On page 73 of Flat Tax Revolution, Steve Forbes gives and example of what his flat tax form would like. As my example below shows, it is a lot simpler:

The Steve Forbes Flat Tax Form
Line Item	Amount
1. Wages & Salary
2. Number of Adults in family
3. Number of Children in Family
4. a) Deductions for adults (multiply line 2 by $13,200) or b) Deductions for head of household ($17,160)
5. Deductions for dependants (multiply line 3 by $4,000
6. Total deductions (line 4 plus line 5)
7. Taxable income (line 1 minus line 6)
8. Pre-credit tax (multiply line 7 by 17%)
9. Child tax credit ($1,000 per child under 16)
10. Earned income credit (see EITC rules)
11. Total tax credits (line 9 plus line 10)
12. Total tax (line 8 minus line 11)

Topics: Flat Tax |

Comments to “The Steve Forbes Flat Tax Form”

personal finance canny Says:
September 15th, 2005 at 4:33 pm

He’s just keeping it simple stupid (KISS). If the current tax forms were like this, i’d be able to do my own taxes.

anonymous Says:
September 15th, 2005 at 4:51 pm

This would eliminate taxes for many many americans if ever enacted into the law. I believe some of the Eastern European nations already employ this kind of simpler tax system. Good Post.

Gerard Says:
September 15th, 2005 at 6:30 pm

Looks interesting, something about line 1 struck me though, it doesn’t ask for income , just “Wages & Salary”. I know very little about Forbes’ plan, under the flat tax is investment income taxable at the same rate?

And I would be very interested to see the corporate tax form.

JLP Says:
September 15th, 2005 at 6:44 pm

Investment income of any sort is NOT taxed under Forbes’ plan. His reasoning is that dividends are already taxed at the corporate level BEFORE they are paid to investors, therefore, they should not be taxed again.

Pat Says:
September 16th, 2005 at 11:19 am

The problem with this as I see it is that the burden of paying taxes would fall even more squarely on the shoulders of the middle class (ie, the people that earn a reasonably high wage). The lower end wouldn’t change too much, as this is basically how taxes work for them right now anyway (their rate would go up, but I still think many would have their situations unchanged). The upper end would be wonderfully insulated - the more they shift their assets away from a wage-earning job and into various types of investment income, the more they are protected from tax.

Does Forbes plan allow for refundable credits? Right now, EITC and the child tax credit can be paid out even if the filer has zero tax liability, meaning that right now, lots of people not only are paying no tax, but the government is subsidizing them (especially when they have kids).

Jose Says:
September 16th, 2005 at 12:06 pm

All in favor of flat tax.

Rich people pay less than 15% anyway right now.
Poor people right now pay around 15% in taxes and 15% in Social Security (yes, the employer portion counts… since upon a replacement of SS, the government would ask the employers to keep contributing to special accounts).

Poor people pay 30%.
Rich people pay 15% or less.

The current tax system with all its deductions is made to make poor people believe they are getting the best of it, and rich people enjoy the stupidity of those who support it.

JLP Says:
September 16th, 2005 at 12:10 pm

Jose,

I don’t see how rich people pay less than 15% right now. Do you have an example for that?

Jason Says:
September 16th, 2005 at 2:06 pm

Another thing to consider with this type of tax scheme would be the government’s inability to influence behavior through the tax system. The tax code is used to encourage or discourage all sorts of behavior:

it encourages generosity and charity through the charitable gift deduction (and make no mistake about it, charitable giving would decline if it were not tax deductible)

it encourages people to attend college and upgrade their skills through the Hope credit and the Life time learning credit - an educated work force is critical to economic growth

it discourages short term investing in favor of long term through the structure of the capital gains tax

it encourages businesses to make investments in long term assets and buildings through the depreciation deduction

the energy bill recently passed builds on a tradition of using taxes to encourage people to drive fuel efficient cars, cut down on their energy use at home and buy energy efficient appliances and home upgrades

the tax code is used to entice businesses to hire and train new employees and to locate their businesses in economically depressed areas

it is used to encourage the self-employed to buy health insurance

it is used to encourage people to save for retirement through tax advantaged accounts

And many, many other things.

The tax code is a powerful fiscal policy tool that the government uses to try to control and stimulate the economy and effect social change for the better (or at least that is the plan!). Certainly not everyone agrees with the need for each and every program like the ones above, but it seems rather drastic to end the government’s ability to encourage charitable giving or education by simplifying the tax code as proposed by Forbes. And what a boon his plan would be to the wealthy! Almost as much of a boon to the wealthy as a national sales tax would be! Can you get a more regressive tax than a sales tax?

JLP Says:
September 16th, 2005 at 4:56 pm

Jason,

And that’s exactly why the tax code is so complicated and also why there are so many loopholes.

I seriously doubt that changing to a flat tax would hurt charitable giving. Most people give because they want to give, not because they get a tax break.

sjr Says:
September 17th, 2005 at 2:20 pm

My wife and I are high wage earners and pay close to 30% of our income in income taxes alone. This would significantly shift the tax burden to the guy making $100K a year with 2 kids. The current system aloows them to pay less than 10% of their income in income taxes due to credits for kids etc. These families would be paying almost double and the upper income families would be paying half. To say that the rich don’t pay income taxes is absurd. Only the rich that have over $50mill and can afford to not earn wages and have all of their investments in tax-free’s is the only way for the rich to reduce their taxes.

JLP Says:
September 17th, 2005 at 4:44 pm

I did the math and it looks like my wife and I would pay more in taxes under Forbes’ system. I’m okay with that because I think the system would be more fair for everyone.

Jason Says:
September 19th, 2005 at 7:30 am

Eliminating the tax deduction on charitable donations will
decrease the amount of giving - it’s Economics 101. The
effect would be to increase the “price” of charitable giving
and that would decrease the total quantity of giving. It is
an amazingly simple concept.

Jason Says:
September 19th, 2005 at 7:55 am

That is why the President moved to allowed people to deduct donations
made at the beginning of 2005 on their 2004 tax return - to
encourage donations for Tsunami relief by lowering the “price”
of donating.

stephanie Says:
September 22nd, 2005 at 11:13 am

I currently live in a flat-tax state (PA), and it is definitely a blow to low wage people. I moved mid-year last year, and my husband and I earned about 22,000 in PA. The state taxes we paid in PA were higher for only 2/3rds of our annual income than the taxes we paid on our whole income in NY (both with and without out-of-state tax payment credits). Granted, the tax form in NY is as complicated and fun as the federal form, but for a savings of $300-$400 (in state taxes mind you!), it’s worth it. I’m not sure how someone who owns property and/or makes $100K/yr would fare under both systems, but the flat tax, at least as implemented in PA, is not as fair to the little guy.

Drew Says:
March 25th, 2006 at 11:55 am

The flat tax issue is designed to create incentives for workers to become more efficient at their jobs. This in turn makes them more likely to receive promotions whether its from fry cook to shift manager there is a diffrence in pay. One of the richest men in America, Kevin Turner,who started as a cashier at Wal-Mart in the 70’s, worked his way up to become one of the highest paid non-Walton’s. He is now the second in command of a small company you may have heard of Microsoft. All I am saying is the more money you earn the more you get to keep. If you decide to stay at your current economic level (or class) and not improve your lot you are punished with a higher percentage of your income going to government, because it is those members of society who require the most from the government. For example welfare programs (disablity and social security not included) create a drain on our society with people unwilling to provide any service to our economy because they “choose” to sit at home and do nothing and get paid. There has to be something driving these people, an “incentive” to get them back into the workforce and taxation is one of the fiscal policies a government can use to create such an incentive. BUT continuing with a overcomplicated tax system that even some tax service companies dont understand and recently messed up on their own books is quite silly. I just want everyone to have the same incentives to work so we can reduce the margins and move closer to an efficient economy and pull our nation out of its long running deficit that Ben Franklin himself was in fear of when the first US Bank was created. And look at us today we are digging a deeper and deeper grave for generations to come. Poor old Ben is rolling over in his grave with every passing year that we AMERICANS sit by the way side and do nothing.

Greg Says:
April 5th, 2006 at 3:57 pm

A A family of four (2 adults and 2 children under 16) would have NO tax libility until their income exceeded about $46,000. At the end of 2005 the median income was just over $44,000. I keep hearing people talk about how the poor and middle class is paying the majority of taxes, what I never hear them do is define what poor or middle class is. Also, the top 50% of wager earners pay 96.54% of all income taxes with the top 1% paying more than a third at 34.27%. The bottom 50% of wager earners currently pay less than 4% of all income tax paid and under Forbes plan that would remain the same. What’s the problem?

Jack Yoest Says:
July 3rd, 2006 at 12:29 pm

What Does China Admire Most About America?

It is good to have health and strength …number one… a strong country It is good to support your country… Your Business Blogger was touring a large Chinese university. (Goodness, every Chinese university is large.) Anyway, I was interested…

Pete Says:
October 28th, 2006 at 9:02 pm

The reason why I like Steve Forbes’ flat tax plan is the same reason why I like President Bush’s plan for privatization of social security: People’s financial certainty, freedom, independence and opportunity to build wealth is increased. Both these ideas seek to minimize governmental interference in order to maximize individual prosperity to all Americans; especially, poor families of four that earn under $36,000 a year. Why not make our economic engine into a hot-rod and give it as much horse-power as possible? People become wealthy through learning how to save, invest into assets and building their educations and/or entrepreneurial ability through taking risks. Privatizing social security and establising a flat tax will allow Americans to successfully accomplish these objectives and I strongly urge my fellow Americans to support their financial futures by supporting these ideas to fruition.
Thanks for reading my opinion and have a good day!

Chad Sargent Says:
October 29th, 2006 at 10:51 am

I respect that you like the flat tax plan, but I must point out that it has all but died on the vine.

The flat tax is indeed an improvement on our current tax system mess, but the FairTax came along and blew it out of the water.

The FairTax bill (HR 25) has considerable support in Congress with 58 co-sponsors in the House and three in the Senate, with grassroots support growing daily. The House flat tax bill (HR 1040) has 6 co-sponsors, and there are three flat tax bills in the Senate, but there is no solid consensus about the specifics of a flat tax. It just hasn’t jelled.

Visit http://www.FairTax.org and find out more. Start with the research paper comparing the flat tax with the FairTax.

http://www.fairtax.org/PDF/FairTaxFlatTaxIncomeTaxComparisonChart.pdf

The FairTax completely and permanently replaces our tax system; it’s the most researched and documented form of tax replacement in history. It’s the only tax reform that will truly grow the economy, de-tax the poor and return lost jobs and investment capital to our country. It transfers power to the people, as our Founders intended. They warned us about direct taxation of income; the flat tax is just another form of it. To return to the Founders’ vision and plan for this country, we must abandon income taxation in any and all forms and shift to taxing consumption, without looking back.

Please check into it, and join the grassroots movement to permanently end income taxation and pass the FairTax into law.

Regards,

John Kurkowski Says:
October 29th, 2006 at 12:51 pm

This would be a second alteritive to the fair tax. Howerver, the two key point that were made by several replies: 1. Corparte/Business taxes do not exist! They are passed on in higher prices or the company moving operations overseas and headquatering of shore. 2. Charitable contributions would decrease. Lets put charitable and political contributions on the same playing field. Politicans may have to become statesmen again and return to the job they were elected to do.

Maureen Schmidt Says:
October 29th, 2006 at 6:30 pm

Please look at the FairTax legislation(HR25 and S25)before committing to a flat tax. The FairTax is just that: a FAIR TAX! Everyone pays a fair share - regardless of your income (reportable or otherwise). In addition, the FairTax ELIMINATES the IRS COMPLETELY! Make April 15th just another day and ensure that EVERYONE in this country pays their fair share of taxes. Visit http://www.fairtax.org and get all the facts.

Ron Woodward Says:
October 29th, 2006 at 10:43 pm

An amazingly simple form. Anyone besides me notice that only people who earn wages or a salary pay taxes? No place to report income from investments. I guess Steve Forbes will not pay much. How about the simplest form possible…NONE! With the FairTax everyone pays when they buy. No forms to fill out ever! Big spenders like Steve Forbes will pay their fair share as will I and everyone else. No class of people are exempt or treated differnty. That is Fair and progressive due to the prebate. Check out FairTax.ORG

William Boykin Says:
October 30th, 2006 at 8:37 am

As I understand the “Flat Tax” it has no impact on business taxes and hence does not help the bleeding of our economy and wealth. The “Fair Tax” will provide a great attractor to businesses around the world and tax foreign goods - to level the playing field for our products and services. Ireland seems to be a good example for not taxing business. In addition we will become savers under “Fair Tax” and begin to own our National debt - and not be subject to the risk of the Chinese, et.al. owning our debt. Our debt could be greatly reduced by the rapid growth in the economy.

James Canaday Says:
October 30th, 2006 at 9:22 am

Flat Tax is better than what we have now ..
For over 40 years ( when the idea was presented to me in a sensible way) I have been studying a consumption tax & believe me the FairTax is the way to go .. It filled in the “holes” that I was having trouble with.

Read the book (FairTax) of get a copy of the bill HR25.

JSC

Seth Marks Says:
October 30th, 2006 at 10:55 am

I respect anyone who thinks our current tax code needs replaced, NOT improved! That being said I like the flat tax. But anyone who thinks that our wonderful power hungry representatives will not continue to tinker with a new flat tax until it ends up like our current tax code just doesn’t see the big picture! I proudly support the Fair Tax and the repeal of the 16th amendment!

John Paul McDaniel Says:
October 30th, 2006 at 3:51 pm

Here is the FINAL SOLUTION!! to the IRS & Income Tax hassle.

I’m sending you this highly informative material on the Fair Tax Act, HR 25, that is currently introduceed in the House Ways and Means Committee, also in the Senate as bill S 25.

50 Reasons I Support the FairTax
(How many reasons can you give for supporting the present obsolete IRS & income tax system?)

Those Who Know the Facts Love the Fair Tax
“Family Friendly Tax Reform”
Tax Reform with far less pain and much more gain!
Out with the Old Code and in with the New

http://www.fairtax.org

1. It allows you to keep 100% of your paycheck, with nothing withheld for Social Security and Medicare payments.
2. It eliminates the regressive payroll tax that hurts the poor. Currently, every one of us is taxed a minimum of 7.65% on our first-dollar of wages up to $90,000, if we earn that much.
3. It assures that the wealthiest Americans will be voluntarily helping to fund social security with every last dollar they spend above the poverty level. Today, earnings are subject to payroll taxes only up to $90,000. The wealthiest Americans therefore do not pay into the system above that amount. If their earnings are from investments, no earnings fund the Social Security system. Under the FairTax, a single purchase (regardless of the source of the earnings) can result in greater contributions to the Social Security system than would be paid by an individual under the payroll tax of today.
4. It provides funding for Social Security and Medicare at a level equal to or greater than at present, with a stronger and broader tax base.
5. It secures the future of Social Security and Medicare because all spenders fund it and not just the workers.
6. It eliminates all personal income taxes, payroll taxes, corporate income taxes, gift taxes, death taxes, and capital gains taxes.
7. It eliminates the income tax and the IRS. Members of Congress and the public overwhelmingly agree that the current internal revenue code is cumbersome, intrusive, coercive, and inefficient.
8. It is revenue neutral with the present income tax system, funding the federal budget at current levels.
9. It will remove an average of 22% of the cost of American made goods by removing the built-in payroll tax (the other 7.65% of earnings that employers pay) and other business taxes that are now passed to consumers as an “embedded” tax of approximately 22% due to the cascading of income and payroll taxes paid by U.S. employers, at every step of production, to the U.S. Treasury.
10. It doesn’t tax used items – clothes, cars, homes. Only new items are taxed when sold by a business to an individual.
11. It is progressive, a “prebate” of the tax amount up to the poverty level is given to everyone. This means that those spending below the poverty level have a net gain because the “prebate” exceeds the amount paid in taxes. (Under the present system they pay the payroll tax even if they get a full refund of income tax withheld.)

12. It eliminates 90% of the cost of compliance. American families and American businesses waste an estimated $250 – $600 billion per year doing the paperwork necessary to comply with the tax code. That is roughly $1,000 – $2,000 annually for every man, woman and child in the U.S.
13. It creates an opportunity for our products to leave this country costing an average of 25% less, thus increasing our exports, lower our deficit balance of trade, and increasing employment at home.
14. It encourages investment in companies located in the U.S., thus providing a home for money already in the US and attracting more. The U.S. will be the most attractive tax-free haven in the world for doing business. American companies will return from offshore and overseas.
15. It encourages repatriation to the U.S. of money held by U.S. individuals and companies now in foreign countries, with no tax consequence.
16. All 290 million Americans and 51 million visiting tourists fund Social Security and Medicare with their purchases. Today only 110 million workers fund these programs via deductions from their paychecks.
17. The broader tax base includes the ten percent of our economy, an estimated $1 trillion, that today is underground or under the table. Under the FairTax, the illegal drug dealer will pay his tax just like the rest of us when he buys his sunglasses, BMW, and other items, as will those who do business for cash.
18. It allows families to save more for home ownership, education, and retirement. An average family making $50,000 will have $7,500 more spendable income.
19. It makes educational tuition a tax-free expenditure of tax-free income.
20. It makes American products more competitive overseas by removing the embedded tax from them, thus lowering their prices, which compensates for low foreign wages.
21. It makes American products more competitive at home by removing the embedded tax from them, compensating for the low cost of imported products not burdened by taxes imposed by exporting countries.
22. It removes the need for formal 401-K’s, IRAs, HSA, etc. Anyone will be able to set up any kind of savings or investment account without regard to taxes or the government.
23. It frees churches and other non-profit organizations from the expense of filing tax returns and paying their half of Social Security and Medicare payments for employees. There will no longer be any 501.c.3 or 501.c.4 non-profit tax status, because there will be no more tax to be exempt from.
24. It restores to churches and non-profit organizations the 1st Amendment right to engage in free speech, without fear of losing their tax-free status.
25. It gives individuals and businesses the right to donate as much as they want to in a given year to charitable causes.
26. It restores the 4th Amendment, protecting against unreasonable searches and seizures, from which the IRS presently is exempt.
27. It restores the 5th Amendment, which guarantees the right to due process. Under current systems the IRS has their own courts with their own set of rules not included in the 5th.
28. It cleans up a major flaw in campaign financing, eliminating campaign donations for “tax favors”.
29. It eliminates wrangling in Congress over tax cuts, the tax code, and who is or is not paying a fair share of the tax bill.
30. It encourages work by letting workers keep 100% of their earnings and giving a rebate, to boot, making the notion that the more you work, the more money you have, a reality, unlike the current system where welfare is lost when you go to work, so your first dollars earned after taxes just offset what you were currently getting in welfare, making you no better off.
31. It allows more of the lower income families to become home owners by allowing a second job income above their current income (all tax free) to be applied to a mortgage. Money for down payments for homes is also saved totally tax free so that it will accumulate faster.
32. It allows families to retain farms and businesses in the hands of those who built them through the elimination of the death tax.
33. It allows families to help each other out tax-free, by eliminating the gift tax.
34. It encourages individuals to self-insure, making the health system more direct pay (no 3rd party pay), thus bringing costs down.
35. Without FICA to pay, most states, counties, municipalities, and school districts will see a large increase in their state budget revenues, additionally lowering the overall tax burden (State & Federal) for most Americans.
36. It assures that no American will find, at the end of the year, a need to get a loan to pay taxes as an alternative to penalties, interest, or cheating.
37. It restores individual privacy. The government no longer needs to know where you work, what you are earning, and what you are doing with it.
38. It eliminates the need to have a “marriage” clarification declaring who you live with, as that has no bearing at all on a state or federal sales tax.
39. It eliminates the need for courts to decide which divorced parent gets to take the tax deduction for children.
40. It reduces production costs for farmers and other subsidized businesses, leading to a reduction in subsidies, thus reducing the federal budget.
41. It eliminates the administrative costs incurred by states in collection of state sales taxes because states will piggyback the state tax collection onto the national tax collection, for which they are compensated by the FairTax ¼% administrative cost give-back. [Doesn’t this go to the retailers?]
42. It results in a windfall profit for many of those holding taxable corporate high interest bonds at the time of passage of FairTax, since they will not be taxed under FairTax. (A higher interest rate is usually paid to entice investors to buy the corporate bonds rather than go with the lower interest, but tax free, municipal bonds, now.)
43. It shifts the tax to consumption, which consumption tables over time show is more stable than income, therefore the tax revenue stream is likely to be a more stable and predictable amount.
44. It results in Federal Reserve rates being based on current consumption, which is rather stable, instead of future earnings, which are less predictable, resulting in surer inflation prevention.
45. It allows for better planning by businesses, because they no longer have to consider tax implications for everything they do.
46. It makes higher employment or better compensation possible in the small business sector where today it costs approximately three dollars in compliance costs to pay one dollar in payroll and income taxes.
47. It moves many now providing tax preparation, advice, accounting, planning, and records maintenance into an expansive economy where they will be producing goods and services. There they can add to the standard of living of all Americans and likely earn more than they do currently, instead of shuffling paper for the government (and not contributing anything economically to society).
48. It relieves citizens of the risk of facing the shift in burden of proof that is so common with the current system, i.e., the taxpayer is guilty unless innocence can be proved, when even IRS staff sometimes give conflicting interpretations.
49. It’s simple, unambiguous, and certain, the opposite of the current tax code.
50. It’s good for the environment. It reportedly would save about 300,000 trees a year that are needed to produce the paper for the IRS compliance and tax forms, enough to reach around the equator placed end to end 28 times. Also, since it taxes only new items, it would encourage buying tax-free pre-owned cars, clothes, furniture, houses, etc. Reuse is good for the environment, too.

Best Regards,
John Paul McDaniel

Go to: http://www.fairtax.org

arthur lewis Says:
October 30th, 2006 at 7:07 pm

mR. fORBES NEEDS TO GET ON BANDWAGON, fAIR TAX IS NOT flat tax

Daniel Gutting Says:
October 30th, 2006 at 8:51 pm

The only thing we need to ask any politition who wants our vote is “will you sponsor and promote the Fairtax.

Rudy Treml Says:
October 30th, 2006 at 9:01 pm

After reading all the positions on this matter, it appears to me that the FairTax Bill, HR-25, is the only way to go. And, it is the way our founding fathers setup our Constitution in 1789 ..Article 1, section 8, “all Duites, Imposts and Excises shall be uniform throughout the United States” and Article 1 , section 2, “direct Taxes shall be apportioned”. Our Constitution worked great for 125 years and we became the greatest country in the World without a income tax. Then came Amendment 16 ratified in 1913 which made income tax legal and our system of taxation has been steadily choking America. This event, which started in 1909 with Corporate income tax, is/has destroyed the Amreican way of life. The Fairtax will correct this situation and again make America the land of freedom for both the individual and economic freedom for our Corporations. everyone should read the FairTax book and join Fairtax orgnaizations forming in all 50 States. Please keep in mind that we the people need to control the flow of money out of Washington which can only be accomplished by controlling the flow of money into Washington. The Fairtax revenue bill addresses all these concerns since people, all the people, pay only on what they consume — they have choice and no one pays taxes up to the poverty levels. And finally, the monies raised for our Government to function are transparent for everyone to see.
Rudy

Bill Woessner Says:
October 30th, 2006 at 9:10 pm

Two comments:

1) There are plenty people who earn a lot and pay little in taxes. This year, my wife and I will have a combined income of about $135K. But because of all the holes in the tax code, I expect we’ll pay about 5% in federal income taxes.

2) Regarding the deduction for charitable donations: Under the current system, for every dollar you donate, the IRS gives you a few cents back. That’s nice, but you always come out ahead (in terms of dollars) not making the donation in the first place.

In addition, under a national sales tax system, charitable donations are 100% tax free. From an incentive standpoint, this is far superior to the current system. Currently, charitable donations are only tax-deductible if you itemize (roughly 30% of tax payers).

Joan Trentham Says:
October 30th, 2006 at 11:23 pm

If we had the FairTax, there would be no form and we would keep all of the money we earn.
Go to FairTax.org

lamar wilson Says:
October 31st, 2006 at 11:59 am

The “FairTax Plan” returns us to the “Liberty” that our forefathers designed for us !!! Wake up Americans, take back your liberty, your freedom. Isn’t this one of the main reasons we rebelled against King George in the first place, several hundred years ago. It’s time to make our government an advocate of the people, not an adversary !!!

Kyle Carroll Says:
October 31st, 2006 at 1:05 pm

The other point of concern to Americans today is illegal immigration. The Fair Tax provides instant revenue retention that currently sneaks back to Mexico through the wire system. The Fair Tax forces the illegal’s into paying tax at the point of sale, and if we further restrict the wire transfers we keep that money in America. The Fair Tax would also force multi millionaires to remove their hidden money in the Grand Caymans, and put it to work in America. Suddenly we would become the greatest tax haven in the world. People this is the (KISS) economic method.
KC

Mary Ann Young Says:
November 1st, 2006 at 3:35 pm

Along with agreeing with almost all of the responses supporting the Fair Tax, one of the things I like the best is: You would never need to report your income to the government. They don’t need to know how much we make. Also, we would not be penalized for earning additional funds. When you can’t live on Social Security and go to work to earn additional income, you are penalized under the current system. Everyone needs to become informed about the Fair Tax. It is so superior to what we currently have.
Go to FaurTax.org

Charlie Says:
November 1st, 2006 at 4:40 pm

Using taxes for social engineering is proven as effective. Want to increase an activity? Reduce taxes on that activity. Want to decrease an activity? increase taxes on that activity. Presently we tax production. It is decreased by moving offshore. We do not tax consumption on a national level. We have a negative savings rate. The Fairtax addresses so many things screwed up by our current revenue collection system. Take a few minutes to thoughtfully consider the vast changes that will come from this innovative way to save Social Security/Medicare while saving the country for the next generation

Doug McCue Says:
November 1st, 2006 at 8:01 pm

Once again on a site where taxes are being discussed and the public can make comments, FairTax supporters take over. There’s little more I could add to the numerous points made here, except…for those of you who may be on the fence about Tax Reform (Flat vs. Fair), consider the number of FairTax supporters who responded here and look at the volume of information and reasons why the FairTax is a superior taxing system. Sure the Flat Tax may be better than the monster we live with now, but for how long? Politicians have proven their skill at manipulating income tax systems to their advantage (remember tax reforms just a decade ago?) Also, an improvement is no match for a complete replacement. The FairTax, developed by Economists not Politicians, is the answer!!

Jessie Johnson Says:
November 2nd, 2006 at 2:52 pm

I just read the FairTax website.

I am a convert! Forget the Flat Tax! I’m now for FairTax!

Tom Kropewnicki Says:
November 2nd, 2006 at 8:01 pm

A flat tax, for all intents and purposes, is what we got with the 1986 tax reform. Here we are 20 years later and the tax code has been amended over 14,000 times since then.
Only the FairTax is true tax reform. We the American People need to get behind the FairTax. It’s the first tax plan NOT developed by politicans. http://www.fairtax.org says it all.

Chad Sargent Says:
November 4th, 2006 at 6:27 am

True, using taxes for social engineering is effective, however…

That power belongs at the state and local levels, not federal, per the 10th amendment:

Amendment X. The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

We have ignored this amendment for too long and allowed federal government to become too big, fat, complex and expensive. Passing the FairTax will restore a big chunk of that power back to the states and the people.

Let’s get ‘er done.

ben parker Says:
December 29th, 2006 at 12:27 am

There will no longer be any 501.c.3 or 501.c.4 non-profit tax status, because there will be no more tax to be exempt from.

Tina helen Says:
July 2nd, 2007 at 2:28 am

That is what the American people want. They know that our current income tax system is broken. It is complex, it is unfair, it inhibits saving, investment and job creation, it imposes a heavy burden on families, and it undermines the integrity of the democratic process.

Robert Ledbetter Says:
September 23rd, 2007 at 11:14 am

The myth about the Fair Tax is that it will allow you to keep your gross monthly income.

It won’t

The architect of the Fair Tax Plan Harvard Economist Dr. Dale Jorgenson in 1996 before the Senate Committee on tax reform,which Forbes was part of pointed out quite clearly that the the employee would still wind up with the same net pay after the Fair Tax Plan was implemented

The so called “embedded” taxes of the so called 23% which includes the Federal Tax,and payroll taxes paid by the employer and employee will be used to reduce PRODUCERS PRICES,it will not be retuned to the employee

This reduction in turn will reduce consumer prices by 23% and the consumer will pay the 23% sales tax on the backend of the purchased good or service at the point of purchase.

You can contact professor Jorgenson to check this out at djorgenson@harvard.edu

You’ll be bringing the same net pay home after the Fair Tax Plan as you did before it,and there will be no change in consumer prices

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laughter Says:
October 27th, 2008 at 7:58 pm

Who wants to privatize social security now?? Millions of americans would’ve lost half their retirement savings if this scheme had come to pass.

hahaatlaughter Says:
January 27th, 2009 at 4:35 pm

first off laughter, a bunch of people did lose a bunch of their savings. a problem i have with the whole thing is 1. people not paying attention to their retirement (looking at their 401k’s and IRA’s on a regular basis) and then bitching when it doesn’t pan out and 2. the fact that I’m contributing to social security and it won’t be there for me. So I would LOVE to privatize social security. but the only problem is that it’s people like myself who need to bail out the idiots. as far as the flat tax goes, it’s brilliant.

kuliekid Says:
February 27th, 2009 at 10:28 pm

flat tax or national sales tax looks like the only way out of the mess we have let ourselves get into. Washington lobbyists have sold us down the river one little tax dodge at a time and it is high time for us to take charge and convince our congress men that we the people are demanding that they do away with the IRS and adopt a flat tax. Some lawyers and accountants will have to find new work but into each life some rain must fall. I think we need a concerted letter writing campaign to our congressmen demanding they make this change. Bring enough pressure and we willo be heard and we caqn win.

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The Steve Forbes Flat Tax Form